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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5028
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am a Uk citizen living in the UK. Up until 22nd July 2015

Resolved Question:

Hello.
I am a Uk citizen living in the UK. Up until 22nd July 2015 I was in full time employment for 11 years. I decided to leave my job in order to pursue other projects, studying a distance learning course or my career and self building my first house.
In this time I have not earned any money, I have now 2 weeks temporary employment coming up.
I want to know what the situation is with tax payments. Will I pay tax on the wages I earn or as it will be below my tax free allowance which I think is £11000 will I be exempt from tax on these wages?
Thanks
David
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your question..

You state you have not worked since 22 Jul 2015.

You are now in a new tax year 2016-17 and you would get a personal allowance of £11,000 for this tax year.

When you start a new job you are most likely to be put on an emergency tax code of 1100L (cumulative basis) or 1100L mth 1 (every month is treated independently). Provided your earnings remain below £916 pm there would be no tax. In the event you are given a tax code 1100L mth 1, you can request tax office to revise your code to 1100L (without Mth1). In this case, your tax allowance is cumulative.. meaning your allowance to Jul 2016 would be (916x4) around £3,664 and provided your earning are below this figure in Jul 2016, there would be no tax payable.

More information on tax codes can be found here

http://www.litrg.org.uk/tax-guides/employed/how-do-i-check-my-coding-notice

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 1 year ago.

I have been given a P46 form by the temporary employer to fill out so I will avoid emergency tax.

the total wages before tax will be no more than £3500.

Will this make a difference?

Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your reply..

If you complete P46, you will likely be on tax code 1100L (cumulative basis).

That being the case your wages of £3,500 would be below the total tax free pay to date (based on pay date Jul 2016) and therefore no tax would be deducted.

If this amount was paid in Jun then your tax free to end Jun will be around £2,751 and there would be some tax payable (3,500-2,751) 749 x 20% = £150.

I hope this is helpful and answers your question.

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Expert:  taxadvisor.uk replied 1 year ago.

I thank you for accepting my answer.

Best wishes